Extra Credit

Franchise and business opportunities at a glance.
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This story appears in the December 1997 issue of Entrepreneur. Subscribe »

Many high school students have after-school or weekend jobs, but students at Fosston High School in Northwest Minnesota can work during school hours--and get educational credit for it. Fosston is home to Tunes N Technology, the only student-run RadioShack franchise in the world.

The idea arose when the school district's Educational Visions Committee recommended that students be provided with both entrepreneurial and employee work opportunities. A survey of students indicated that a RadioShack franchise would be very popular, but convincing Ft. Worth, Texas-based parent company Tandy Corp. that it would work was another story. "Their initial reaction was `You want to do what? Where?' But after they found out how thoroughly the kids had researched and planned this, they sent some people to talk to us," says Sandy Steile, the teacher who led the effort.

After obtaining funding, the store opened for business in October 1995. Although the student workers make minimum wage, a major perk of their employment is a wealth of knowledge. "I've learned a lot from working there," says Patrick Schmidt, a Fosston freshman. "Managing money, doing security and customer service [is] good experience."

Steile agrees: "It may not be a typical classroom, but the learning I see these students achieving is monumental."

Smooth Sailing

By Elaine W. Teague

The ocean breeze, sumptuous meals, the sun, the fun . . . and that's just the franchisee and employee training. With 26 major cruise lines and 125 ships to choose from, Anthony Persico and Charlotte Luna, co-founders of Deerfield Beach, Florida-based CruiseOne Inc., have recently given their cruise specialist franchisees new incentive to grow: discounted training fees for franchisees who wish to add employees.

And a comprehensive training program it is. In five days, employees inspect six to nine ships, sample a variety of meals and acquaint themselves firsthand with the product they'll soon be offering customers. "[Employees] get an idea of what the cabins and all of the amenities are like--the spas, the fitness clubs, nightclubs and everything else that makes a cruise a cruise," says Persico. Employee training, which used to cost franchisees $995 per employee, has been reduced 40 percent under CruiseOne's new program.

Of CruiseOne's 320 franchisees in 45 states and Puerto Rico, the majority work from home. But that doesn't stop them from feeling like part of something larger. Capitalizing on the benefits of volume, the franchisor purchases cruises at reduced rates, allowing the franchisee to pass the savings on to his or her customers. CruiseOne also negotiates the franchisee's newspaper advertising.

For would-be franchisees, success could be on the horizon. CruiseOne reports that only 7 percent of Americans have ever taken a cruise. So come on in--the water's fine.

Creme De La Creme

By Natasha Emmons

Whisper the words "Krispy Kreme" in the ear of anyone who grew up in the South, and their eyes glaze over as they remember the yeast-raised doughnuts of their childhood. Southern icons from comedian Jeff Foxworthy to Elvis Presley, who reportedly kept a dozen of the tasty pastries on hand at all times, have trumpeted their devotion to Krispy Kremes.

Now, after 60 years of being a purely Southern staple, Winston-Salem, North Carolina-based Krispy Kreme Doughnut Corp. is expanding with franchises nationwide.

"The brand awareness nationwide is unbelievable," says Phil Waugh, Krispy Kreme's vice president of franchising. There are currently 125 shops operating in 17 states, and the company has commitments from new franchisees to open more than 100 shops over the next several years.

To keep the ingredients of Krispy Kreme's batter a secret, the dry mix is prepared at one location and shipped to franchisees.

Despite its move into new territory, Krispy Kreme plans to keep its traditions alive. Says Krispy Kreme's Mike Cecil, "The company has a rich heritage and a lively, vibrant culture that we don't want to lose as we grow outside the Southeast."

Beauty Marks

By Elaine W. Teague

Like mother, like daughter--and grandmother and great-grandmother. Los Angeles-based Merle Norman Cosmetics has left its beauty mark on four generations of a Greenville, South Carolina, family. It was during the late '50s when Beryl Hiller, then 52 and recently widowed, left her job at the cosmetics counter of a local department store and purchased her first Merle Norman franchise. Within a decade, she was the proud owner of three successful Greenville-area Merle Norman Cosmetics Studios.

Hiller, who died in 1980, retired in the mid-Seventies, passing on the joys of skin care and makeup artistry to her daughter, Joyce Tucker, 66, who retired in 1990 and sold two of the studios to her daughters, Elaine Finley, 44, and Susan Grant, 43. Hiller's great-granddaughters Jessica Finley and Stephanie Grant, both 16, help out the store--albeit behind the scenes.

"[After] 28 years, I love it as much now as I ever have," says Elaine, who, along with her sister Susan, began working after school at her grandmother's Merle Norman Studios while still in her teens. "We've all been able to benefit from the steps [our grandmother] took," says Finley.

On the other side of the beauty counter, you'll find multiple generations as well: Women in their 60s, 70s and 80s, original customers of Beryl Hiller's, whose daughters and granddaughters shop at Merle Norman, too. Tucker, who is now enjoying semi-retirement with her husband, still helps her daughters Elaine and Susan when she's needed. "It's sort of a switch to work for my daughters, [but] I'm very supportive of what they do," says Tucker. And, she adds, "I still enjoy selling Merle Norman cosmetics."

Brushing Up

By Elaine W. Teague

For Matt Coughlin's old neighbors, it must have seemed like déjà vu. Every four years since he was 10 years old--until his family moved out of the area--Coughlin followed his father's orders and repainted the family home in Deerfield, Illinois. In those days, as Coughlin is quick to point out, he did it all wrong. But with the help of a strong if-at-first-you-don't-succeed philosophy, Coughlin improved with each attempt.

Fast forward several years, and none of those neighbors would have been surprised to learn Coughlin had become a successful Certa ProPainters franchisee. But they were surprised one day earlier this year when Coughlin and employees of his Arlington Heights, Illinois-based franchise showed up to once again paint his childhood home. The home's new owners were happy to accept Coughlin's sentimental offer of a free paint job, and Coughlin feels he has finally satisfied his father's original request. Says Coughlin, "I definitely had the right tools and equipment [this time]."

On The Double

By G. David Doran

Being a franchisee doesn't mean you have to be single-minded. Franchisees who have diversified into other businesses are often more savvy, have increased sales and typically suffer less during economic downturns. According to Valvoline's Greg Pitkoff, more than 33 percent of the 132 franchisees of Lexington, Kentucky-based Valvoline Instant Oil Change have an interest in one or more businesses besides Valvoline, but the company's executives don't view this as a sign of disloyalty. On the contrary, they see it as a sign of wisdom.

"People who have franchises besides a Valvoline bring a business expertise that some of the newer franchisees don't have," says Jerry Wipf, president of Valvoline. "He or she already knows what a franchisor expects from a franchisee."

When the "other" business is placed on the same site as the original store, the two often complement each other. Henry Sahakian, a Valvoline franchisee in State College, Pennsylvania, placed Valvoline centers next to some of his pre-existing Uni-Mart convenience stores. "Having two businesses on one site tends to bring in many more people," says Sahakian. "We do a greater volume of business, and both stores benefit."

Diversification can also be a franchisee's saving grace when business slumps. According to Jay Rutherford, a Lexington, Kentucky, Valvoline franchisee who also owns several Taco Bell restaurants, "If you have all your eggs in one basket and your business has a setback, you risk losing everything you have. But if you spread out a little bit and have some diversification, then you'll have some breathing room."

Video Game

By G. David Doran

As an Auburn University student, Kelly Ryan dreamed of working behind the scenes at a TV studio. She considered applying at CNN, but a summer spent as an intern at a Pensacola, Florida, TV station made it clear there was no room for creativity in a studio control booth. A family friend suggested that she purchase a Video Data Services (VDS) franchise. Though much younger than a typical franchisee, Ryan didn't let this dissuade her.

"I have a degree in radio and TV production, but technically, I didn't have a clue. VDS showed me the ropes," says Kelly, who now videotapes and edits weddings, fashion shows and theatrical events. "I get to work at home and keep my own hours. I love being my own boss."

Kelly's enthusiasm for her work has not gone unnoticed. In 1996, her first year with VDS, she won the "Most Outstanding New Affiliate in the Nation" award from the company. Recently, she was hired as the official videographer of the Pensacola Children's Chorus--a group CNN doesn't usually get to cover.

What's New

By Connie Cousins

When a commercial cleaning franchise goes into residential cleaning, no one blinks an eye. But when Memphis, Tennessee-based ServiceMaster launched Minneapolis-based senior assistance franchise Caring Companions in 1995, it wasn't your run-of-the-mill expansion.

The 26-plus-unit franchise system serves those who need affordable assistance in the home, rather than hospitalization or nursing care. "Understanding the importance of caring is essential for our franchisees," says founder and president Dale Peterson. The franchisor provides orientation, training and software applications for operating the business.

Clean Sweep

By Natasha Emmons

Looking to clean up? Check out the opportunities that came out in the wash in a recent survey commissioned by Memphis, Tennessee-based cleaning franchisor ServiceMaster.

Half the 700 U.S. households polled by Message Factors Inc., a Memphis, Tennessee, market research firm, use professional cleaning services for some projects. Fifty-one percent of home carpet-cleaning jobs go to outside companies--more than any other cleaning service. Rugs, however, are the least likely to receive a professional sprucing up, at only 20 percent.

Southwesterners were least likely to hire a professional cleaning service, while the Western region likes its textiles tidy, spurring above-average drapery and furniture/upholstery cleaning (see "Neat Notes," left). Age matters little in who hires cleaning professionals: Respondents over age 50 are only slightly more likely than younger respondents to hire dust busters. Rather, income emerged as the deciding factor, with 51 percent of respondents who earn $75,000 or more per year using cleaning services vs. only 25 percent of households earning less. Entrepreneurs, start your vacuums!

Neat Notes

A growing percentage of Americans are relying on professinal cleaning services:

Northeast Midwest Southeast Southwest West
Carpets 49%* 49 57 43 58
Draperies 26 42 39 26 56
Rugs 24 16 23 10 25
Furniture/ 27 30 33 21 39

Contact Sources

Caring Companions, 5353 Wayzata Blvd., #510, Minneapolis, MN 55416, (888) 227-3077

Certa ProPainters, 4238 Arlington Heights Rd., Arlington Heights, IL 60004, (847) 604-0409

Complete Video Services, 6821 Kitty Hawk Cir., Pensacola, FL 32506, (904) 453-3422

CruiseOne Inc., (800) 892-3928, ext. 219, http://www.cruiseone.com

Krispy Kreme Doughnut Corp., http://www.krispykreme.com

Merle Norman Cosmetics, 700 Haywood Rd., #220, Greenville, SC 29607, (864) 297-1753

ServiceMaster, 860 Ridge Lake Blvd., A2-1834, Memphis, TN 38120, (901) 684-7607

Tunes N Technology, 116 E. First St., Fosston, MN 56542, (218) 435-2126

Valvoline Instant Oil Change Franchising Inc., 3499 Dabney Rd., Lexington, KY 40509, (800) 622-6846

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